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| The closing domestic prices of RSS-4 and ungraded rubber improved by 50 paise and Rs 2 to close at Rs 49 and Rs 46.50 per kg, respectively, on renewed buying orders on Thursday.
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| Heavy rains, which are projected to hit the growing areas, could disrupt tapping and rubber prices are expected to improve further in the coming days supported by a good overseas demand.
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| In the international markets too, the price of natural rubber is at a high. RSS 3rd grade, which is the equivalent of RSS-4 in India, is trading at more than Rs 48 per kg.
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| It went up by 12 paise on Thursday.
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| Levies and other charges for this grade, which is suitable for tyre manufacture, comes to Rs 56 when imported. This has resulted in lower imports.
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| The futures market is also doing better with prices and volumes stabilising at higher levels.
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| While September delivery for RSS-4 was being traded at Rs 48.25 and October delivery at Rs 48.03, November and December deliveries were being quoted at Rs 48.01 and Rs 48, respectively Cochin Rubber Merchants Association president N Radhakrishnan, who is also a rubber exporter, is expecting prices to rise further in the coming months.
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| Domestic rubber consumption is expected to grow by eight per cent, which would be higher than the average industrial growth rate in the country.
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| Moreover, with international prices of rubber ruling high, exports, too, are expected to look up.
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| As against this, production is increasing only by around two per cent. This will lead to a shortage in the availability of rubber in the Indian market and trigger an upward movement in price, Radhakrishnan explained.
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| In India, sectors using natural rubber such as tyres and rubber belting companies have done well of late in terms of sales volumes.
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| Sales of tyres have been rising on the back of higher vehicles sales and upgradation of tyres on existing vehicles to cope with higher speeds on improved highways and city roads.
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| An industry analyst, who did not want to be named, said global rubber consumption is projected to rise by around 7 per cent from 18.11 million tonne in 2002 to 19.35 million tonne during this calendar year.
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| This would further go up by 5.2 per cent to 20.36 million tonne in 2004. Since Indian rubber command good market internationally, the increase in global demand would lead to increased exports in the coming months, outstripping the supply position.
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| Though these developments augur well for the growers it is not as favourable to the domestic rubber product manufacturers and other rubber consuming industries like tyre producers because rubber prices would rule high increasing the cost of their production and put tremendous pressure on their margins, he added. |
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